Microsoft Corp. Chief Executive Officer Satya Nadella testified on Monday as a witness for the U.S. Justice Department in its antitrust trial against Google, accusing the search giant of abusing its market power and harming competition.
Nadella’s Personal Involvement in Bing and Edge
Nadella was instrumental in the development of Bing, Microsoft’s search engine, which was created in an attempt to catch up with Google and capture a chunk of the online advertising market. However, Bing has lagged behind Google on mobile devices, where Google pays billions of dollars to smartphone makers and wireless carriers to make its search engine the default option.
Nadella also oversaw the launch of Edge, Microsoft’s web browser, which replaced Internet Explorer and was designed to compete with Google’s Chrome. However, Edge has struggled to gain traction among users, who prefer Chrome for its speed, security and features.
Nadella told the court that he was personally involved in discussing some of these issues with his Google counterpart, Sundar Pichai, and tried to negotiate better terms for Microsoft’s products. He said that Google’s dominance in search and browser markets made it difficult for Microsoft to offer consumers more choices and innovation.
Google’s Alleged Anticompetitive Practices
The Justice Department has accused Google of unlawfully maintaining a monopoly in the search market by paying $10 billion a year to rivals, smartphone manufacturers and wireless carriers to make its search engine the default option on mobile devices and web browsers. The government argues that this practice locks out competitors and harms consumers, who are deprived of alternatives and privacy options.
Google has denied the allegations, claiming that its payments are fair and that consumers can easily switch to other search engines and browsers if they want to. Google also asserts that its products are superior in quality and that its success is based on user preference, not illegal behavior.
The government hopes to use testimony from Nadella and other executives from Microsoft to show how even a company of its size and resources couldn’t unlock Google’s hold on the search market. Last week, Microsoft business development executive Jonathan Tinter testified that Microsoft failed to secure a deal to put its Bing search app on Apple’s products, even though it was willing to offer far better terms than Google and lose multiple billions of dollars on the agreement. In the end, Apple signed a fresh deal with Google.
Tinter also told the court that Microsoft’s Surface Duo smartphone was required to use Google search in order to license the Android mobile operating system and was limited from using Bing on its own devices.
The Implications of the Trial
The trial, which began in September, is expected to last for several weeks and could have significant implications for the tech industry and the online economy. If the government wins, Google could face remedies such as breaking up its business, changing its contracts, or paying fines. If Google wins, it could cement its dominance and fend off future challenges from regulators and rivals.
The trial is also seen as a test case for the Biden administration’s approach to antitrust enforcement, which has been more aggressive than the previous administration. The Justice Department has also filed a separate lawsuit against Google over its dominance in online advertising, and the Federal Trade Commission has sued Facebook over its acquisitions of Instagram and WhatsApp. Several states have also joined the antitrust actions against Google and Facebook, alleging that they harm consumers and competition.